Three Cheers for the Credit Downgrade

Bovard: “what is happening right now is people are recognizing that governments do not have a magic wand. Doesn’tt matter what the politicians say, the government and the Federal Reserve runs out of ammunition. Perhaps the clearest measure of the loss of confidence in US government is the rising price of gold. People simply don’t trust the dollar anymore, and they are fleeing into hard assets.”

Bovard: “It would not surprise me at all if there were further downgrade of the US credit rating. But from my perspective that would be a good thing because it would make it more difficult for the American politicians to borrow money. Much of the problem with the US economy in the last decade has been that the politicians have borrowed so much money from abroad and elsewhere and they have wasted so much money and that has become a heavier and heavier burden on the American economy and the American people.”

Bovard: “More and more people around the world are recognizing that governments are simply not trustworthy. Much of the trouble in Europe is that Greece, Italy, and other governments are simply lying about how much money they spend and how much deficit spending have they been involved in.
Once people start to see these governments cannot be trusted, of course you are going to have a loss of confidence. This may have a good result in the long run, if people recognize that politicians need to be put on a much shorter leash. Letting these politicians spend all this money is going to wreck their economic future. ”

Bovard: “Most politicians are fairly ignorant and not very honest, and that is true when they are making economic policy as well as when they are doing other things. The fundamental problem is that American politicians have seized so much power over American economy and over American lives and that is playing out in a way that is undermining other parts of the world’s economy.”